Discover and read the best of Twitter Threads about #rehypothecation

Most recents (7)

1/ IT'S OFFICIAL!!! Welcome to #Wyoming, @krakenfx!


What a win-win for #crypto & Wyoming! As of **NOW** Kraken has a US bank charter—a 100% reserves-required, audit required (w/ #ProofOfReserves), custody via legal bailment, no #rehypothecation type of bank!🤠
2/ The vote of #Wyoming's Banking Board just concluded & it was UNANIMOUS! It took 27 months for the first #Wyoming SPDI to obtain a charter—congrats to the dozens of people who made it happen, esp @GovGordon, @TylerLindholm & Wyoming legislators & the Wyoming Division of Banking
3/ I’ll be back w/ more analysis later. Next applicant in line for #Wyoming SPDI is @AvantiBT later this Fall (more are on the way). But today is @krakenfx's day. As a shareholder, I'm so happy for @jespow & Kraken team! Applications for this charter opened a yr ago--took longer
Read 5 tweets
1/ MORE ANALYSIS-Goldman's new head of #digitalassets is a #repo trader based in LONDON. This is significant bc UK law basically has no limits on #rehypothecation. To be clear I'm not worried abt #bitcoin--as a system it's immune to WallSt's leverage games
2/ That doesn't mean its price won't be impacted tho--bc #rehypothecation fulfills real demand w/ artificially created supply & thereby suppresses price, all else equal. Rehypothecation works as long as there's a lender of last resort. But #bitcoin has no lender of last resort!🚧
3/ So, how many times could a #bitcoin be rehypothecated? In UK there's basically no limit bc the broker/dealer takes outright title to the customer's asset. This is why Lehman transferred so many of its assets to its UK subsidiary from its US subsidiary.…
Read 6 tweets
@ObiWanKenoBit @zanepocock @mrcoolbp @thibm_ @Tom_Harned @alphaazeta @MartyBent @matt_odell @BlockFiZac 1/ Yep—agree, @zanepocock, great job with the thread. A couple things: #rehypothecation **is** fractional-reserve banking by another name. FRB is typically associated with money (+ a central bank), but the exact same thing can happen w/ any asset (eg, a claim to #bitcoin, a loan
@ObiWanKenoBit @zanepocock @mrcoolbp @thibm_ @Tom_Harned @alphaazeta @MartyBent @matt_odell @BlockFiZac 2/ ...collateralized by #bitcoin, US Treasury bonds, Apple shares etc). Rothbard wrote that the only legit form of govt action was to ban FRB—were he alive today, we would have been screaming about #rehypothecation too bc it has the same effect—it distorts the price of money...
@ObiWanKenoBit @zanepocock @mrcoolbp @thibm_ @Tom_Harned @alphaazeta @MartyBent @matt_odell @BlockFiZac 3/ ...(ie, it distorts the interest rate). One beauty of #bitcoin is that it’s a pure experiment in free banking. No govt controls the base money, so all excess/phantom claims to it are created privately by intermediaries—hence, a pure experiment in free banking. It’s a great...
Read 7 tweets
1/ WOW-the Fed is looking to do a stealth QE5. I’d missed this but as usual Jeffrey Snider at @Alhambralnvest is on top of it + understands what it really means. Gee, ya think the Fed finally figured out WHY there are problems in the repo mkt—bc there’s...…
2/ ...only 1 real US Treasury security for every 3 owners whose brokerage accts show they own it (per IMF estimate)? It’s no shock why mkts periodically become illiquid when banks hoard claims on Treasuries (~2/3 of which aren’t real). The Fed needs a way to swap those claims...
3/ ...for something “real” when mkts seize & this is it—bank reserves. “Real” in quotes, sarcastically. The fact that this repo facility is on the table does, indeed, mean things aren’t quite right in fin mkts, as Jeff says. They never were. I suspect he’d agree. #rehypothecation
Read 3 tweets
1/ BOOM! #Wyoming just recognized clear, direct property rights for #digitalassets by passing SF125! This means #blockchain cos will prob want to apply WY law to your contracts, domicile here, &/or have a physical presence here. Thx again to the army of ppl who helped over months
2/ As @TraceMayer says, v impt for broad adoption of #crypto that it be “backwards-compatible w/ law.” SF125 enables that. Bill was amended w/ improvements & latest is here:…. Goes to @GordonGovernor for signature & could officially become law next week
3/ I'll publish analysis after it officially becomes law, but here's the key: #Wyoming law recognizes property rights in the DIRECT ownership of #digitalassets. Property law in US is determined by states, not the feds. WY not only did it first but did it right!! This applies to
Read 11 tweets
1/ TWEETSTORM about #Wyoming’s BIG REVEAL. This is long & info-packed, so buckle in. My native state is about to do bigger things for #blockchain, & the sector is about to pay Wyoming back big-time. Win-win! @Tyler_Lindholm @SenatorDriskill @TraceMayer @ForbesCrypto
3/ New bill 2 parts. 1-Digital asset custody via #SEC #CustodyRule wld create first true #QualifiedCustodian for digital assets (for investors who by law can’t self-custody). 2-Defines property rights for digital assets—doing something HUGELY IMPT for #bitcoin/virtual currencies
Read 40 tweets
1/ CRINGE ALERT: if the regulator of your #crypto exchange/custodian requires this, run! "A DAB (digital asset biz) shld have a minimum amount of assets on-hand, within the organisation, to withstand the withdrawal of all client assets." @BermudaMonetary…
2/ I found that gem in Bermuda's "Digital Asset Custody Code of Practice." Consumer protection is listed as the first core objective of the effort (…). Sorry, but I don't see much meaningful consumer protection in here. @TraceMayer would probably agree...
3/ ...and here's another gem, in a section titled Account Segregation🤔:
"While keeping client assets separate from its own, DABs may commingle client assets..." Believe it or not, the quote in the prior tweet was in a section titled Proof of Reserves! There's a lot of great...
Read 12 tweets

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